Corporate taxation: evasion, incentives, and the shadow economy

Abstract

In this thesis I examine two elements of firm behavior with respect to taxation: efforts to reduce tax liability, and responses to incentives in the tax code. In the first and second chapters I analyze how the tax and regulatory environment affect firm incentives to engage in tax evasion and avoidance. In the third and fourth, I examine the effectiveness of a tax credit in Portugal intended to stimulate business investment. The thesis advances our knowledge of how firms react to government intervention, with important implications for policy design.